Skip to comments.Was Bush Right on TARP?
Posted on 11/09/2010 11:36:40 AM PST by Starman417
Most conservatives just slapped their heads and groaned in consternation over the above statement; and probably also wanted to slap silly the president they've otherwise supported and defended for the last nigh 8 years in office.
The Troubled Asset Relief Program was heavily criticized by many conservatives. In light of the stimulus spendings and expansion of government under the current PotUS, some Americans even forget that TARP was initiated under Bush and Paulson's leadership, not Obama's (although he did support it, as a U.S. senator).
2 years later, in handling the 2008 financial crisis in the twilight of his presidency, was Bush right?
When the bill was being voted upon 2 years ago, I nervously and unconfidently wrote this:
Republicans who stand opposed do so for ideological reasons: Let the free market run its course, and those who made bad decisions suffer the consequences of having made bad decisions. Democrats oppose the bill for ideological reasons as well, thinking this is a bail-out for Wall Street. Caught in the cross-fire of this mess, is all of the rest of us. If we simply stand aside and allow financial institutions to fail on free market principle, we will all suffer together for the mistakes of others.
[VIDEO AT SITE]
"Two years after it began, the controversial TARP programthe bailout of the financial systemconcludes operations with much-better-than expected results. Most money invested in the rescue has been repaid, often with interest: of the $700 billion originally authorized, taxpayers remain on the hook for less than $66 billion, according to the Treasury Department.
This shows the Bush Bailout starkly contrasting with Obama's Stimulus, which authorized $864 billion in spending, with no pay back. The stimulus permanently shifted money from private sector to government, while TARP temporarily transferred funds from public to private sector. TARP was also bipartisan: most Congressional Republicans supported it, while the stimulus drew united GOP opposition from 214 of 217 Republicans then in Congress.
Short term loans to save private businesses may be debatable but long-term explosions of spending to grow government are always disastrous."
(Excerpt) Read more at floppingaces.net...
This argument has been raging since mid October of 2008.
Medved also was a huge McCain and Amnesty fan. His opinions mean little to conservatives.
The problems are still their and the problem makers are not bankrupt or jailed (after a fair trial of course) which means we’ll see the problem again.
I’ll don the nomex and say yes, I think it was. Every decision has to be evaluated in the context of the time, and just like a decision made in the heat of battle, not every one will look the same through the prism of history. I know, from a friend who has taken part in seminars with some of the same people who advised the Bush administration at the time, they honestly felt that TARP was essential to avoiding a full-scale economic collapse. In the end, I think the tax payers will get their money back out of TARP - not so with the porkulus and the rest of the crap. But TARP, as an emergency measure taken in the fog of economic war, was the right call at the time in my opinion.
I see. So we are to assess people's factual claims on ideological, rather than factual grounds.
And you call yourself a conservative?
I can confidently say this: Bush was wrong for pushing freddie mac and other forms of debt to people who couldn’t afford it.
The original idea of an ownership society (based on the principles of the Contract with America) was that instead of giving the poor a welfare check to spend on what they wanted, that we would push them to get job skills, to actually get a job and that they would actually own something (such as a private SS retirement account) and that would lead them on the road to the middle class.
Bush thought that if the poor bought houses, then that would be another asset they’d own and be responsible for. The problem was that houses are expensive so instead of promoting ownership, Bush promoted indebtitude.
No. Capitalism includes the freedom to fail as well as the freedom to succeed.
We also didn’t have a good alternative to TARP. The leading House GOP alternative didn’t make much sense and TARP was the only viable alternative.
Was it worth it?
Someone will have to explain to me (quantify) what was saved. Because we’re out $66B. Which translates to almost $1400 out of my family’s pocket (my share of the taxes to pay for this).
TARP and the nomination of Paulson for SOT shall be the mill stone around Bush's legacy.
It was a scare tactic scheme to enrich Wall St. and Globalists players. IMHO
It was timed so Bush could try and escape blame for TARP’s huge negative consequences.
IF you like cherry picked “facts” to bolster invading the private sector like a euro-socialist, that’s your problem.
Dodd on TARP: ‘I’ll go to my grave believing we did the right thing’
Others supporting TARP: Obama, Pelosi, McCain, Reid, Barney Fag, Schumer, Snowe, Collins, Specter, Palin.....
Barney Frank rakes in $40G from bailed out banks
IRS Turns TARP Into the Theft that Keeps on Thieving
Another TARP recipient goes under as bank failures for 2010 surpass last year’s total
TARP Report Reveals Deficiencies According To Inspector General
Many banks sit tight on TARP infusions
Obama Administration Shows Phony Tarp Profit Through Tax Trick
Opposing TARP? DeMint, Hunter, Pence, Bachmann, Hensarling, Poe, Inhofe, Sessions, Limbaugh, Malkin, Levin, Heritage, etc etc...
No, no and no again!
Sure the loans have been repaid with interest but thanks to the fact that collateral was worthless having not been marked to market so these banks are actually still insolvent.
So now we’re still stuck with a trillion in bad assets on the books of the Fed and the banks still aren’t lending the way they should, even though Bernanke is trying to get the money flowing by knocking our dollar into the gutter. He won’t get anywhere because the REAL assets of the big banks are crap.
Furthermore, none of the bad paper has been flushed and now we find that it wasn’t even properly transfered so many foreclosures are illegal.
The result is that instead of entering a sharp but brief depression, we’ll have a 15 to 20-year recession. The banks should have been forced into receivership, their assets siezed and the bondholders paid. Then all this bad paper would be audited and sorted out.
Because that’s not what happened, all that bad paper, trillions worth is still on the bank’s books and because we’re idiots, on the books of the Fed. The recession will only end when all that bad paper sees the light of day.
Yes, it would have meant pain in the short term, probably with much higher unemployment for a while. But by now, we’d be emerging from the fall.
Study the Great Depression of 1920 and see what Harding did. Never heard of the 1920 depression? Guess why? Because it started and ended within two years and didn’t involve government intervention!
Contrast that to the FDR model which Obama and Bernanke are following and you’ll note that it was a total FUBAR clusterf**k.
We need to let these businesses fail when they screw up and regulate all forms of usury. That will always work. What we’ve done will never work.
If you like to base your decisions on ideology, comrade, you're free to do so.
But when you presume to tell me to think a certain way, because of your ideology... I'll tell you to go to hell.
You need to get your head straight.
No. Bush was conned. FDIC went on a hiring spree in the spring before the elections because it planned that many banks would be taken down after the election. If the govt knew banks were going to fail 6 months in advance then was there really a sudden crisis that called for Tarp?
Eliminating hindsight what would you have done?
And is stubborn refusal to admit it, shows a deep misunderstanding of the free market.
Listen, twinkletoes, you posted to me first, with a limp-wristed argument at that. I just gave you the REAL facts, ma’am. Actually, just the very tip of the iceberg on your beloved boondoggle. If you didn’t want to chat about it, then you could have picked another thread/topic.
I’d tend to agree with this but there is one big problem. If we had a very sharp depression, Al qaeda and other bad actors would take advantage of the situation.
We did not and still do not have a president that would inspire hope and confidence through extremely difficult times. FDR was for many of the wrong policies but he was one of the few presidents that could do this. Reagan was another.
No. The apocalypse was not at hand. All that was happening was that various existing concerns were in danger of failing, which means a lot of jobs would’ve been lost and markets would’ve collapsed and, yes, the money supply would’ve contracted. But as we all know, jobs were lost anyway, money’s circulation has remained dried up to this day, small sections of Big Business still failed. And though the housing market has remained on life support, that’s not a good thing because as everyone knows its still a ticking bomb.
All TARP accomplished was sending good money after bad, preventing “creative destruction” and inducing the moral hazzard. An argument can be made that things would’ve been worse—for a while—without it. I’m one of those lunatics who thinks there are worse things than sudden collapses. Stretched out stagnation and endless cycles of profligacy and crisis, for instance.
Bush was no different than any other powerful man, from FDR tyo Obama, who took advantage of a panic to feed Leviathan.
Let the dominoes fall. Let the regionals and healthy banks pick the bones clean of the failed ones. Let the market correct. Let the bankruptcy system work.
Oh, right -- you said "conservatives" shouldn't listen to Medved, because he liked McCain. Talk about fag-walking.
I just gave you the REAL facts
Wow.... and it only took me calling you out on your idiocy to make that happen. If you'd bothered to do that the first time....
Actually, just the very tip of the iceberg on your beloved boondoggle.
And there you go, back to fantasy land....
Grow up, pissy.
“The problems are still their”
Exactly (well, changing “their” to “there”). What was it the TARP was supposed to accomplish? Keep money circulating and keep people working. If you haven’t checked the headlines in a while, let me remind you that credit is dry and unemployment high.
There was also the calming the market argument. Surely the stock market is back up, but it’s at best a confusing and mostly a useless signal. How good did it look before crisis hit, anyway? Besides, it was a long, long time before it hit 10,000 again.
You can argue it would’ve been worse. That’s what they said all through the Great Depression. For 14 frickin’ years! Two can play at that game. No one but no one can tell me things wouldn’t have been even better without TARP.
Actually the profit-meme is misleading and “at the same time, the $700 billion proposal does not offer fundamental reforms required to avoid a repeat of the current problem.” From Dick Armey:
-In NTUs blog, he explains the myth of the TARPs profit: The banks that got bailed out through TARP shuffled all of their bad assets over to Fannie Mae and Freddie Mac, which got their own separate bailout. So, really, it should be no surprise that they’re relatively healthy.
Sorry, I said he was a McCain AND amnesty fan. That should be enough for any conservative to pause regarding his opinion, should it not? Maybe not you.
But would you trust a pundit who thought the 2A was not an individual right and that giving power to the UN to collect taxes from US citizens and biznesses was a good idea?
We all draw the line somewhere on a commentator’s bona fides. And since Medved is the fool in this article telling us the crap sandwich was tasty, I was right in line.
“Every decision has to be evaluated in the context of the time, and just like a decision made in the heat of battle, not every one will look the same through the prism of history.”
Which is a great argument for people not having the sort of power we’ve granted, willingly or not, to the president, Congress, the Fed, the treasury, and so on. Nevermind that there’s a direct line between their authority and the crisis in the first place. It’s insane to pretend something as big and nebulous as “the market” or “the economy” can be under control. It’s not a machine. There’s no engineering. No subtle manipulation of switches and keys. No failsafe button. It’s a big bundle of wires designed by no one without a manual.
The battlefield analogy is appropriate, with certain caveats. Dust, smoke, distance and delays prevent a general from seeing the entire field, let alone efficiently relaying orders and expecting them to be carried out exactly as commanded. And even if they could be carried out as commanded, conditions are always changing, so as to make a generals understanding constantly behind the times. Then there are the lower officers, commissioned and non-commissioned—from Czars all the way down to petty bureaucrats—who are equally ignorant.
All that, however, is not the point. The point is, like occassionally with real battles, there may not be any fighting going on at all. We assume the presence of an enemy, but what if we’re killing innocents? What if it’s friendly fire? What if everyone’s just milling about in the dust and haze without any intention, momentum, or motivation whatsoever? What if it’s all a mad general’s fever dream?
The old trope is that conservatives operate on facts, rather than feelings.
The fellow made a factual claim that can be checked .... and you imposed an ideological filter instead. That's feelings at work.
I apologize for snapping at you, btw ... I was out of line.
My excuse, such as it is, is I've lost all patience with that class of FReepers whose idea of discussion is to toss spittle and bile in all directions, with not a rational thought to be found in their brains.
Today seems to be especially bad....
“We also didnt have a good alternative to TARP”
You assume an alternative was necessary. Politically, maybe, because the public is excitable. But I think both their and your feelings on the subject is a perfect example of a big problem with a certain aspect of human nature. Sometimes doing nothing is better. Lazy people have a point.
That’s a good point but a poor argument because the only solutions to our problem now will leave us in far worse shape than a short depression.
A sharp depression wouldn’t necessarily cripple us or our military but what will is what the government and Fed have done. The only solution that will be a permanent fix would be to force the banks into receivership now, and because of our current economic condition, doing so would be far more disastrous.
But that’s not what’s happening. Instead, the Fed is going to try to print our way out of this mess, which is like taking a pail of water out of a lake, and dumping it into the other side of the same lake.
Look at 1970s food prices (just Google it). You’ll see that all the food we buy today is anywhere from 300% to 1000% higher than it was forty years ago. Butter that was .39 a pound is now $3.00 a pound, etc. That’s inflation.
But then if you consider the immense monetary printing that’s going on now, you’ll realize it will take less than three or four years for QE2 to do the same thing to us today because we’re monetizing our own debt exponentially higher than we’ve ever done in the past.
So when the dollar is worthless, the economy in shambles, a loaf of bread costs $15.00 and even rice and beans are mucho expensive, people can’t afford to heat their homes and are living under bridges, etc, what position will we be in and will Al Quaeda be the worst problem we face?
Hint: learn to speak Mandarin.
Bottom line is that no excuse exists as the end result will be far worse than Al Quaeda.
Apology not accepted, only because one was not needed.
But I guess I’ve read way, way too much on TARP over the years to let a sunny assessment, especially by a pundit I have learned to loathe for myriad reasons, stand.
I like Bush just fine, but I’m not going to ever excuse things like NCLB and TARP, just because he’s better than the moron we have in office now.
“Eliminating hindsight what would you have done?”
I don’t need to engage in any sort of thought experiment to do that. I remember very clearly not supporting it at the time (like most people, for various reasons). And I was right. If not for the fact that it would’ve been better without it altogether (we can never know for sue), for the fact that it was a big lie (they didn’t do what they said they were going to do, and perhaps never knew what they wanted to do, just something having to do with lots and lots of money) and it wasted money (can anyone in their right mind say TARP was spent effectively? Who the heck could even measure such a thing?).
Given the number of high-profile firms that actually did collapse in that timeframe, there is a certain plausibility to the claim that doing nothing would in fact cause a more general collapse.
Whether or not the experts were correct in their assessment is a matter for debate -- all we have now, is that TARP was passed, no general collapse occurred, and that a certain amount actually has been paid back.
Yes. But what wasn’t paid back and won’t be is the $$billions to foreign institutions, Fannie/Freddie, GM etc.
Here is a one very good read on the subject, IMO.
“We did not and still do not have a president that would inspire hope and confidence through extremely difficult times. FDR was for many of the wrong policies but he was one of the few presidents that could do this.”
Historians love this sort of argument, since it allows them to do what they already want to do anyway, namely personify eras and bundles of otherwise diverse events. Airmchair psychology is easier than pouring over charts, graphs, and other economic data. I’m not saying they shouldn’t focus on personalities, either. Just that it has little or nothing to do with economics, which is the issue at hand.
What we say when we say FDR had the power to “inspire confidence” is that he was a good politician. That is, a good democratic politician, not necessarily a statesman. Though he was that, too, during the war; or part of the war, anyway, not counting the time he was the walking dead, pandering to “Uncle Joe” Stalin. What I’m saying is he was popular and able to be re-elected. Which is useful to FDR, his party, and its ideology. But I’m at a loss as to why it seems so important to us, at this great distance.
Saying FDR was good for the economy because he was an adept politician is like saying Nancy Pelosi was good for the democratic party because she was good at pushing through legislation. I don’t have to tell you her very strengths were a liability. So it was with FDR, economically speaking. Politics is not economics. Great things in one arena are not great—in fact, often are genuinely harmful—in the other. Though economies require some fundamental political interference (the rule of law, for instance) to thrive, it does not follow that interference is good.
Put aside for the moment the (correct) argument that FDR actively made the economy worse. His “fear itself” trope is dangerous and misleading, in my opinion, but let’s say it inspired people. What does it benefit an economy to inspire the people without recovering? Whether or not FDR wrecked chances for recovery, one thing is certain: he didn’t make anything better. Even if you bend over backward to give him credit for pulling us out of the nadir of ‘32 and ‘33, things got worse again in ‘37 and didn’t get better until ‘46.
All I’m asking is, why do we care so much that he was popular? If there was no discernable economic benefit to his pleasing persona, why the heck do we keep bringing it up in connection to economics? It has nothing to do with that. He might as well have been a preacher or a self-help guru so far as Joe Futures and Sally Grossdomestic were concerned.
I suppose it’s worse to have a depression and an unlikable president. But I just don’t care about publicity and political advertising as much as other people.
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